Economic Growth, Human Development, and Welfare

Dasgupta，Purnamita1; Edenhofer，Ottmar2; Amezquita，Adriana Mercedes Avendano3; Bento，Antonio4; Caney，Simon5; De la Croix，David6; Fosu，Augustin7; Jakob，Michael8; Saam，Marianne9; Shrader-Frechette，Kristin10; Weyant，John11; You，Liangzhi12; Delgado-Ramos，Gian Carlo13; Dorsch，Marcel J.8; Flachsland，Christian8,14; Klenert，David8; Lempert，Robert15; Leroux，Justin16; Lessmann，Kai17; Liu，Junguo18; Mattauch，Linus19; Perrings，Charles20; Schwerhoff，Gregor8; Steckel，Jan8; Strefler，Jessica17; Seyboth，Kristin21

2018

English

Economic growth is often much lauded, but it also has its critics (Section 4.1.1). It may be viewed as a double- edged sword. On the one hand, it may be viewed as a narrative of liberation, lifting people out of poverty. On the other, it may be viewed as one of alienation, increasing inequality, and associated with environmental degradation. Although Gross Domestic Product (GDP) is used dominantly as a measure of economic growth, there are many competing definitions of the more general concept of economic development and also competing indicators proposed as alternatives to GDP in measuring economic growth (Section 4.1.2). There are many linkages between economic growth, sustainable development, and social welfare (Section 4.1.5). The Industrial Revolution, which was a milestone in economic growth, led to increasing per- capita incomes, but also fundamental transitions in the way societies are organized, including changed fertility patterns, increasing investment in education, and rapid urbanization (Section 4.1.3). Determinants of economic growth and stagnation include population and demography (Section 4.2.1), education and human capital (Section 4.2.2), technological change (Section 4.2.3), resource endowments, geography, and environment (Section 4.2.5) and various actors, institutions, and politics (Section 4.2.6). Welfare/ well- being5 is an overarching goal for policymakers. It is multidimensional in the sense that it includes poverty, inequality, the environment and other public goods such as health and education. It is normative in the sense that there are multiple perspectives on what matters to society (happiness, capabilities to function, etc.). Economic growth is important in that it positively impacts welfare along some dimensions and negatively along others. Growth in income per capita in itself is viewed to matter in itself in that it contributes to other goods, such as preference satisfaction (Section 4.3.1.1), happiness (Section 4.3.1.2), capabilities to function (Section 4.3.1.3), and the meaning of life (Section 4.3.1.4). There is a debate as to whether economic growth should be judged in terms of its contribution to maximizing happiness or preference satisfaction (Section 4.3.2.1), ensuring economic equality (Section 4.3.2.2), raising people above a certain threshold (Section 4.3.2.3), or giving priority to the least advantaged (Section 4.3.2.4), each of which has arguments pro and against. Economic growth has been correlated with fundamental transitions in the way societies are organized, changed fertility patterns, an increase in manufacturing and service sectors as well as energy and material consumption, increasing investment in education and rapid urbanization (Section 4.4.1). It has been shown to be associated with a widening gap in the control of global income/ wealth, suggesting that the gains of economic growth have not been evenly distributed. Economic growth in recent decades has decreased inequality at the global level, but has led to increasing inequality within countries. Economic growth has also been correlated with environmental damage, such as climate change (Section 4.4.2.3), water scarcity and pollution (Section 4.4.2.5), and species extinction (Section 4.4.2.7). Climate change and other environmental damages impact the poor disproportionately, and may also increase inequality within and between countries. Economic growth has also been linked to air pollution (Section 4.4.2.4) and harmful impacts to nature and animals, which are argued to have an intrinsic value in themselves (Section 4.3.1.6). Welfare is a broader concept than the income per capita status of the economy, and is measured by multidimensional indicators including health, education, political voice, environment, etc. (Section 4.4.3.2). Several improved welfare measures have been developed over the last decades, classified into monetary and nonmonetary measures. Indicators may be measured in a disaggregated way (i.e. a dashboard) or via a single indicator (Section 4.4.3.2). Economic growth has been shown to have adverse effects on the global commons, which need to be protected to ensure that any use is sustainable over time (Sections 4.5.1, 4.5.2, and 4.5.3). Governing the global commons requires institutions that enable and facilitate collective action at international, national, and subnational levels. The challenge for policy- makers is to mitigate the negative effects of economic growth while preserving the positive effects. An integrated perspective on growth and capitalism allows for an evaluation of its costs and benefits, and also provides pathways for the transformation of contemporary capitalism, maintaining its driving forces, but addressing inequalities and protecting natural resources. Well- designed and implemented regulation of environmental and other externalities6 leads to increasing welfare, without necessarily impeding economic growth. Environmental regulation creates assets for society.

10.1017/9781108399623.005

Rethinking Society for the 21st Century: Report of the International Panel on Social Progress: Volume 1: Socio-Economic Transformations

1

141-186

Others

2-s2.0-85088111466

Scopus

1.Institute of Economic Growth,Delhi,India
2.Mercator Research Institute on Global Commons and Climate Change (MCC),Potsdam Institute for Climate Impact Research,Germany
3.Universidad Pedagogica y Tecnologica de Colombia,Colombia
4.University of Southern California,United States
5.University of Warwick,United Kingdom
6.Université catholique de Louvain,Belgium
7.University of Ghana,Ghana
8.MCC,India
9.ZEW,Germany
10.University of Notre-Dame,United States
11.Stanford University,United States
12.IFPRI,United States
13.National Autonomous University of Mexico,Mexico
14.Hertie School of Governance,Germany
15.Rand Corporation,United States
16.HEC Montreal,Canada
17.Potsdam Institute for Climate Impact Research,Germany
18.Southern University of Science and Technology,China
19.University of Oxford,United Kingdom
20.Arizona State University,United States
21.KMS Research and Consulting,United States

Dasgupta，Purnamita,Edenhofer，Ottmar,Amezquita，Adriana Mercedes Avendano,et al. Economic Growth, Human Development, and Welfare. 2018-01-01.